Axios Pro Rata

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September 12, 2022

🚨 Situational awareness: Twitter this morning responded to Elon Musk's latest deal termination letter, which argues that Twitter's severance payment to Peiter "Mudge" Zatko violated the merger agreement. Not surprisingly, Twitter disagrees.

  • Twitter shareholders are set to vote on the merger tomorrow.

Top of the Morning

Illustration of a giant stack of money in a briefcase

Illustration: Sarah Grillo/Axios

Josh Harris is done licking his wounds, after losing a power struggle to lead Apollo Global Management and ending up in a bitter legal dispute with fellow co-founder Leon Black.

Driving the news: Harris, who also is co-owner of the Philadelphia 76ers, New Jersey Devils and Crystal Palace F.C., on Friday launched a new alternative asset management firm called 26North.

  • 26North initially will feature private equity and credit strategies, with more than $5 billion in assets under management.
  • The private equity business will be led by Mark Weinberg (Brookfield Asset Management) while its private credit unit will be led by Brendan McGovern (Goldman Sachs). Other execs include Lance West (ex-Centerbridge, Goldman), Evan Zemsky (Apollo), Tina Raja (Blackstone) and Cole Charnas (Security Benefit Life).

Backstory: Harris stepped down from day-to-day management at Apollo in 2021, after failing to oust Black over his ties to Jeffrey Epstein.

  • Black ultimately got to pick his successor, third Apollo co-founder Marc Rowen, and later sued Harris for allegedly conspiring to ruin his reputation. The case was thrown out by a judge who called Black's claims "glaringly deficient in fundamental respects.”
  • Harris formally left Apollo's board and executive committee earlier this year, upon the completion of the firm's merger with insurer Athene.

The bottom line: Harris did a remarkable job keeping 26North under wraps, given that it's hired more than three dozen team members. Now the question is if he can keep building 26North up to where it can rival his former shop.

The BFD

Illustration of a fist crushing a digital glowing block.

Illustration: Gabriella Turrisi/Axios

Bolt, the one-stop checkout company valued by VCs at $11 billion, scrapped its $1.5 billion purchase of Wyre, a blockchain-based payments company.

Why it's the BFD: This would have been the largest-ever crypto merger not involving a SPAC. Now it's just part of 2022's growing scrapheap of broken deals, and another false start for the crypto-as-payment movement.

Backstory: The official line is a mutual termination, but a source close to the deal says the final call was made by Bolt CEO Maju Kuruvilla, who was hired shortly before the original deal was announced, and that Bolt wasn't required to pay a termination fee.

Cap table: Bolt backers include Activant Capital, BlackRock, General Atlantic, WestCap Group and Tribe Capital. Wyre has raised around $55 million from firms like Samsung NEXT Ventures, Great Oaks VC, Ether Capital and the Stellar Development Foundation.

The bottom line: "Private equity and venture capital funding to the space clocked in at $2.7 billion in the second quarter, roughly half of the amount raised in the quarter prior based on S&P data. Another major deal, Galaxy Digital's $1.2 billion acquisition of Bitgo, was terminated in August." — Brady Dale & Lucinda Shen, Axios

Venture Capital Deals

• Gotham Greens, a New York-based indoor produce farmer, raised $310m in Series E funding. BMO Impact Investment Fund and Ares Management co-led, and were joined by Commonfund, RockCreek, Kimco Realty Corporation, Manna Tree Partners and The Silverman Group. https://axios.link/3TWvZS1

🚑 Nimbus Therapeutics, a Cambridge, Mass.-based computational drug discovery platform, raised $125m. Bain Capital Life Sciences and SV Health Investors were joined by insiders Access Biotechnology, Atlas Venture, BVF Partners, Bill Gates, Lightstone Ventures, Pfizer Ventures, RA Capital Management and SR One. www.nimbustx.com

🚑 Pretzel Therapeutics, a Waltham, Mass.-based mitochondrial biology startup, raised $72.5m in Series A funding. Arch Venture Partners and Mubadala Capital co-led, and were joined by HealthCap, Cambridge Innovation Capital, Cambridge Enterprise, Angelini Ventures, GV, Invus, Eir Ventures, GU Ventures and Karolinska Institutet Holding. www.pretzeltx.com

• Lumafield, an X-ray computed tomography startup, raised $35m in Series B funding. Spark Capital led, and was joined insiders Lux Capital, Kleiner Perkins, DCVC and Future Shape. https://axios.link/3Qv66FW

• Diveplane, a Raleigh, N.C.-based ML ops platform, raised $25m in Series A funding. Shield Capital led, and was joined by Calibrate Ventures, L3Harris Technologies and Sigma Defense. https://axios.link/3B6vqwo

• Cledara, a Denver-based software management platform, raised $20m in Series A funding. CommerzVentures led, and was joined by Carbide Ventures, Massive and insiders Nauta Capital and Notion Capital. https://axios.link/3Qv5Bf2

• Bachan's, a Sebastopol, Calif.-based Japanese BBQ sauce brand, raised $13m in Series A funding. Sonoma Brands Capital led, and was joined by Prelude Growth Partners and New Fare Partners. www.bachans.com

• Kippa, a Nigerian financial management app for merchants, raised $8.4m in seed funding from Goodwater Capital, TEN13 VC, Rocketship VC, Saison Capital, Crestone VC, VentureSouq, Horizon Partners and Vibe Capital. https://axios.link/3RC2cfT

• Tonal, an SF-based connected at-home strength and personal training system, is raising more than $100m at a $1.9b valuation, per Bloomberg. Last year it raised $250m at a $1.6b valuation. https://axios.link/3L4IdUx

Private Equity Deals

• Beringer Capital acquired Dig Insights, a Toronto-based market research consultancy. www.diginsights.com

• Igneo Infrastructure Partners agreed to buy US Signal, a rand Rapids, Mich.-based data center and network solutions provider. www.ussignal.com

🌷 Klis Capital bought Flower Kingdom, a Palm Beach Gardens, Fla.-based provider of custom floral arrangements, plants and gifts. www.flowerkingdom.com

🚑 Pharos Capital Group invested in Renal Care 360, a Franklin, Tenn.-based nephrology practice and chronic care management company. www.renalcare360.com

Public Offerings

Comeback Momma Said Knock You Out GIF by LL Cool J - Find & Share on GIPHY
Source: Giphy

• Six companies plan to price IPOs on U.S. exchanges this week, led by AIG carveout Corebridge Financial ($1.8b raise) and Third Harmonic Bio ($153m). https://axios.link/3QF8jP0

• Agendia, an Irvine, Calif.-based provider of genetic tests for breast cancer, withdrew registration for a $75m IPO. It has raised nearly $180 million from firms like Norgine Ventures, Athyrium and Korys Investments. https://axios.link/3U0ddsR

SPAC Stuff

• DLQ, a New York-based provider of digital consumer acquisition solutions, agreed to be acquired at an implied $114m valuation via Abri SPAC I (Nasdaq: ASPA), a tech SPAC led by Jeffrey Tirman. DLQ is a wholly owned subsidiary of Logiq (OTX: LGIQ). https://axios.link/3LlP3oZ

• Great Southern Homes, a homebuilder in Georgia and South Carolina, agreed to go public at an implied $572m enterprise value via DiamondHead Holdings Corp. (Nasdaq: DHHC), a SPAC led by David Hamamoto (ex-Colony Capital). https://axios.link/3QCvnhe

• Nature's Miracle, an Upland, Calif.-based provider of indoor growing software and hardware, agreed to go public at an implied $265m valuation via Lakeshore Acquisition II (Nasdaq: LBBB). www.nature-miracle.com

• INSU Acquisition IV, an insurance-focused SPAC formed by Cohen & Co., withdrew registration for a $220m IPO. http://axios.link/kxkD

Liquidity Events

• KKR is seeking to sell its stake in Indian financial services firm Avendus Capital, which could be valued north of $500m, per Bloomberg. https://axios.link/3Dgm3g2

⚡ XL Fleet (NYSE: XL) acquired Spruce Power, a Houston-based residential rooftop solar systems owner and operator, from HPS Investment Partners for $58m in cash and the assumption of $542m in debt. www.sprucepower.com

• Vista Equity Partners and Elliott Management plan to sell Wrike, after completing their $16.5b buyout of Citrix Systems (Nasdaq: CTXS). Vista sold Wrike to Citrix last year for $2.25b. https://axios.link/3RZ2GMz

• Zynga, a unit of Take-Two Interactive (Nasdaq: TTWO), acquired Storemaven, an Israeli provider of mobile growth and app store optimization solutions whose backers have included 500 Startups and Kima Ventures. www.storemaven.com

More M&A

• CleanSpark (Nasdaq: CLSK) is paying up to $42.5m to buy a bitcoin mining facility and equipment from Mawson Infrastructure Group (Nasdaq: MIGI). https://axios.link/3QzHpbu

• FotoNotes, an Oakland-based provider of mobile software for residential property field ops, acquired SiteCapture, an Austin, Texas-based field ops platform for the solar industry. www.sitecapture.com

• JPMorgan (NYSE: JPM) agreed to buy Renovite, a Fremont, Calif.-based payment processing company. www.renovite.com

• Pentwater Capital Management is opposing Rio Tinto's (LSE: RIO) $3.3b agreement to buy the 49% stake it doesn't already hold in Canadian copper miner Turquoise Hill Resources (TSX: TRQ). Pentwater owns nearly a 12% stake in Turquoise Hill. https://axios.link/3d4c7M2

Fundraising

• EQT raised €2.2b for its debut growth equity fund. https://axios.link/3ByhQ6b

It's Personnel

• Goldman Sachs is prepping for layoffs that could begin this month, as deal-making slows, per the NY Times. https://axios.link/3B8WlHN

🚑 Soltan Bryce, former head of growth for Plume, joined the investment team of health care-focused VC firm Flare Capital Partners. www.flarecapital.com

• Patrick Conroy and Hans Sherman joined H.I.G. Growth as managing directors. Conroy previously was with Revolution Growth, while Sherman was with Bain Capital Tech Opportunities. H.I.G. Growth also hired Albert Koh and Andy Lefkarites (both from Owl Rock) as principals, and promoted Eric Yee to principal. www.higgrowth.com

• Paul Emery and Michael Korzinstone joined Altas Partners as partners. Emery previously was with Hellman & Friedman, while Korzinstone was with Cinven. www.altas.com

Final Numbers

Supply chain VC
Source: PitchBook. Data for global deals through June 30, 2022.

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